Joseph Stalin

Economic Problems of the USSR

Reply to Comrades A.V. Sanina and V.G. Venzher

I have received your letters. It can be seen from them that their authors are making a profound and serious study of the economic problems of our country. There are quite a number of correct formulations and interesting arguments in the letters. But alongside of these, there are some grave theoretical errors. It is on these errors that I propose to dwell in this reply.

1. Character of the Economic Laws of Socialism

Comrades Sanina and Venzher claim that "only because of the conscious action of the Soviet citizens engaged in material production do the economic laws of socialism arise." This opinion is absolutely incorrect.

Do the laws of economic development exist objectively, outside of us, independently of the will and consciousness of man? Marxism answers this question in the affirmative. Marxism holds that the laws of the political economy of socialism are a reflection in the minds of men of objective laws existing outside of us. But Comrades Sanina's and Venzher's formula answers this question in the negative. That means that these comrades arc adopting the position of an incorrect theory which asserts that under socialism the laws of economic development are "created," "transformed" by the directing bodies of society. In other words, they are breaking with Marxism and taking the stand of subjective idealism.

Of course, men can discover these objective laws, come to know them and, relying upon them, utilize them in the interests of society. But they cannot "create" them, nor can they "transform" them.
Suppose for a moment that we accepted this incorrect theory which denies the existence of objective laws of economic activity under socialism, and which proclaims the possibility of "creating" and "transforming" economic laws. Where would it lead us? It would lead us into the realm of chaos and chance, we should find ourselves in slavish dependence on chances, and we should be forfeiting the possibility not only of understanding, but of simply finding our way about in this chaos of chances.

The effect would be that we should be destroying political economy as a science, because science cannot exist and develop unless it recognizes the existence of objective laws, and studies them. And by destroying science, we should be forfeiting the possibility of foreseeing the course of developments in the economic life of the country, in other words, we should be forfeiting the possibility of providing even the most elementary economic leadership.

In the end we should find ourselves at the mercy of "economic" adventurers who are ready to "destroy" the laws of economic development and to "create" new laws without any understanding of, or consideration for objective law.

Everyone is familiar with the classic formulation of the Marxist position on this question given by Engels in his
Anti-Dühring :

Active social forces work exactly like natural forces: blindly, forcibly, destructively, so long as we do not understand, and reckon with, them. But when once we understand them, when once we grasp their action, their direction, their effects, it depends only upon ourselves to subject them more and more to our own will, and by means of them to reach our own ends. And this holds quite especially of the mighty productive forces of today. As long as we obstinately refuse to understand the nature and the character of these productive forces — and this understanding goes against the grain of the capitalist mode of production and its defenders — so long these forces are at work in spite of us, in opposition to us, so long they master us, as we have shown above in detail. But when once their nature is understood, they can, in the hands of the producers working together, be transformed from master demons into willing servants. The difference is as that between the destructive force of electricity in the lightning of the storm, and electricity under command in the telegraph and the voltaic arc; the difference between a conflagration, and fire working in the service of man. With this recognition, at last, of the real nature of the productive forces of today, the social anarchy of production gives place to a social regulation of production upon a definite plan, according to the needs of the community and of each individual. Then the capitalist mode of appropriation, in which the product enslaves first the producer and then the appropriator, is replaced by the mode of appropriation of the products that is based upon the nature of the modern means of production; upon the one hand, direct social appropriation, as means to the maintenance and extension of production — on the other, direct individual appropriation, as means of subsistence and of enjoyment."(1)

2. Measures for Elevating Collective-Farm Property to the Level of Public Property

What measures are necessary to raise collective-farm property, which, of course, is not public property, to the level of public ("national") property?

Some comrades think that the thing to do is simply to nationalize collective-farm property, to proclaim it public property, in the way that was done in the past in the case of capitalist property. Such a proposal would be absolutely wrong and quite unacceptable. Collective-farm property is socialist property, and we simply cannot treat it in the same way as capitalist property. From the fact that collective-farm property is not public property, it by no means follows that it is not socialist property.

These comrades believe that the conversion of the property of individuals or groups of individuals into state property is the only, or at any rate the best, form of nationalization. That is not true. The fact is that conversion into state property is not the only, or even the best, form of nationalization, but the initial form of nationalization, as
Engels quite rightly says in Anti-Dühring. Unquestionably, so long as the state exists, conversion into state property is the most natural initial form of nationalization. But the state will not exist forever. With the extension of the sphere of operation of socialism in the majority of the countries of the world the state will die away, and, of course, the conversion of the property of individuals or groups of individuals into state property will consequently lose its meaning. The state will have died away, but society will remain. Hence, the heir of the public property will then be not the state, which will have died away, but society itself, in the shape of a central, directing economic body.

That being so, what must be done to raise collective-farm property to the level of public property?

The proposal made by Comrades Sanina and Venzher as the chief means of achieving such an elevation of collective-farm property is to sell the basic implements of production concentrated in the machine and tractor stations to the collective farms as their property, thus releasing the state from the necessity of making capital investments in agriculture, and to make the collective farms themselves responsible for the maintenance and development of the machine and tractor stations. They say:

It is wrong to believe that collective-farm investments must be used chiefly for the cultural needs of the collective-farm village, while the greater bulk of the investments for the needs of agricultural production must continue as hitherto to be borne by the state. Would it not be more correct to relieve the state of this burden, seeing that the collective farms are capable of taking it entirely upon themselves? The state will have plenty of undertakings in which to invest its funds with a view to creating an abundance of articles of consumption in the country."

The authors advance several arguments in support of their proposal.

First. Referring to Stalin's statement that means of production are not sold even to the collective farms, the authors of the proposal cast doubt on this statement of Stalin's by declaring that the state, after all, does sell means of production to the collective farms, such as minor implements, like scythes and sickles, small power engines, etc. They consider that if the state can sell such means of production to the collective farms, it might also sell them other means of production, such as the machines of the machine and tractor stations.

This argument is untenable. The state, of course, does sell minor implements to the collective farms, as, indeed, it has to in compliance with the Rules of the Agricultural Artel and the Constitution. But can we lump in one category minor implements and such basic agricultural means of production as the machines of the machine and tractor stations, or, let us say, the land, which, after all, is also one of the basic means of production in agriculture? Obviously not. They cannot be lumped in one category because minor implements do not in any degree decide the fate of collective-farm production, whereas such means of production as the machines of the machine and tractor stations and the land entirely decide the fate of agriculture in our present-day conditions.

It should not be difficult to understand that when Stalin said that means of production are not sold to the collective farms, it was not minor implements he had in mind, but the basic means of agricultural production: the machines of the machine and tractor stations, the land. The authors are playing with the words "means of production" and are confusing two different things, without observing that they are getting into a mess.

Second. Comrades Sanina and Venzher further refer to the fact that in the early period of the mass collective-farm movement — end of 1929 and beginning of 1930 — the C.C., C.P.S.U.(B.) was itself in favour of transferring the machine and tractor stations to the collective farms as their property, requiring them to pay off the cost of the machine and tractor stations over a period of three years. They consider that although nothing came of this at the time, "in view of the poverty" of the collective farms, now that they have become wealthy it might be expedient to return to this policy, namely, the sale of the machine and tractor stations to the collective farms.

This argument is likewise untenable. A decision really was adopted by the C.C., C.P.S.U.(B.) in the early part of 1930 to sell the machine and tractor stations to the collective farms. It was adopted at the suggestion of a group of collective-farm shock workers as an experiment, as a trial, with the idea of reverting to the question at an early date and re-examining it. But the first trial demonstrated the inadvisability of this decision, and a few months later, namely, at the close of 1930, it was rescinded.

The subsequent spread of the collective-farm movement and the development of collective-farm construction definitely convinced both the collective farmers and the leading officials that concentration of the basic implements of agricultural production in the hands of the state, in the hands of the machine and tractor stations, was the only way of
ensuring a high rate of expansion of collective-farm production.

We are all gratified by the tremendous strides agricultural production in our country is making, by the increasing output of grain, cotton, flax, sugar beet, etc. What is the source of this increase? It is the increase of up-to-date technical equipment, the numerous up-to-date machines which are serving all branches of production. It is not a question of machinery generally; the question is that machinery cannot remain at a standstill, it must be perfected all the time, old machinery being scrapped and replaced by new, and the new by newer still. Without this, the onward march of our socialist agriculture would be impossible; big harvests and an abundance of agricultural produce would be out of the question. But what is involved in scrapping hundreds of thousands of wheel tractors and replacing them by caterpillar tractors, in replacing tens of thousands of obsolete harvester-combines by more up-to-date ones, in creating new machines, say, for industrial crops? It involves an expenditure of billions of rubles which can be recouped only after the lapse of six or eight years. Are our collective farms capable of bearing such an expense, even though their incomes may run into the millions? No, they are not, since they are not in the position to undertake the expenditure of billions of rubles which may be recouped only after a period of six or eight years. Such expenditures can be borne only by the state, for it, and it alone, is in the position to bear the loss involved by the scrapping of old machines and replacing them by new; because it, and it alone, is in a position to bear such losses for six or eight years and only then recover the outlays.

What, in view of this, would be the effect of selling the machine and tractor stations to the collective farms as their property? The effect would be to involve the collective farms in heavy loss and to ruin them, to undermine the mechanization of agriculture, and to slow up the development of collective-farm production.

The conclusion therefore is that, in proposing that the machine and tractor stations should be sold to the collective farms as their property, Comrades Sanina and Venzher are suggesting a step in reversion to the old backwardness and are trying to turn back the wheel of history.

Assuming for a moment that we accepted Comrades Sanina's and Venzher's proposal and began to sell the basic implements of production, the machine and tractor stations, to the collective farms as their property. What would be the outcome?

The outcome would be, first, that the collective farms would become the owners of the basic instruments of production; that is, their status would be an exceptional one, such as is not shared by any other enterprise in our country, for, as we know, even the nationalized enterprises do not own their instruments of production. How, by what considerations of progress and advancement, could this exceptional status of the collective farms be justified? Can it be said that such a status would facilitate the elevation of collective-farm property to the level of public property, that it would expedite the transition of our society from socialism to communism? Would it not be truer to say that such a status could only dig a deeper gulf between collective-farm property and public property, and would not bring us any nearer to communism, but, on the contrary, remove us farther from it?

The outcome would be, secondly, an extension of the sphere of operation of commodity circulation, because a gigantic quantity of instruments of agricultural production would come within its orbit. What do Comrades Sanina and Venzher think — is the extension of the sphere of commodity circulation calculated to promote our advance towards communism? Would it not be truer to say that our advance towards communism would only be retarded by it?

Comrades Sanina's and Venzher's basic error lies in the fact that they do not understand the role and significance of commodity circulation under socialism; that they do not understand that commodity circulation is incompatible with the prospective transition from socialism to communism. They evidently think that the transition from socialism to communism is possible even with commodity circulation, that commodity circulation can be no obstacle to this. That is a profound error, arising from an inadequate grasp of Marxism.

Criticizing Duhring's "economic commune," which functions in the conditions of commodity circulation, Engels, in his Anti-Dühring, convincingly shows that the existence of commodity circulation was inevitably bound to lead Duhring's so-called "economic communes" to the regeneration of capitalism. Comrades Sanina and Venzher evidently do not agree with this. All the worse for them. But we, Marxists, adhere to the Marxist view that the transition from socialism to communism and the communist principle of distribution of products according to needs preclude all commodity exchange, and, hence, preclude the conversion of products into commodities, and, with it, their conversion into value.

So much for the proposal and arguments of Comrades Sanina and Venzher.

But what, then, should be done to elevate collective-farm property to the level of public property?

The collective farm is an unusual kind of enterprise. It operates on land, and cultivates land which has long been public, and not collective-farm property. Consequently, the collective farm is not the owner of the land it cultivates.

Further, the collective farm operates with basic implements of production which are public, not collective-farm property. Consequently, the collective farm is not the owner of its basic implements of production.

Further, the collective farm is a cooperative enterprise: it utilizes the labour of its members, and it distributes its income among its members on the basis of workday units; it owns its seed, which is renewed every year and goes into production.

What, then, does the collective farm own? Where is the collective-farm property which it disposes of quite freely, at its own discretion? This property of the collective farm is its product, the product of collective farming: grain, meat, butter, vegetables, cotton, sugar beet, flax, etc., not counting the buildings and the personal husbandry of the collective farmers on their household plots. The fact is that a considerable part of this product, the surplus collective-farm output, goes into the market and is thus included in the system of commodity circulation. It is precisely this circumstance which now prevents the elevation of collective-farm property to the level of public property. It is therefore precisely from this end that the work of elevating collective-farm property to the level of public property must be tackled.

In order to raise collective-farm property to the level of public property, the surplus collective-farm output must be excluded from the system of commodity circulation and included in the system of products-exchange between state industry and the collective farms. That is the point.

We still have no developed system of products-exchange, but the rudiments of such a system exist in the shape of the "merchandising" of agricultural products. For quite a long time already, as we know, the products of the cotton-growing, flax-growing, beet-growing and other collective farms are "merchandised." They are not "merchandised" in full, it is true, but only partly, still they are "merchandised." Be it mentioned in passing that "merchandising" is not a happy word, and should be replaced by "products-exchange." The task is to extend these rudiments of products-exchange to all branches of agriculture and to develop them into a broad system, under which the collective farms would receive for their products not only money, but also and chiefly the manufactures they need. Such a system would require an immense increase in the goods allocated by the town to the country, and it would therefore have to be introduced without any particular hurry, and only as the products of the town multiply. But it must be introduced unswervingly and unhesitatingly, step by step contracting the sphere of operation of commodity circulation and widening the sphere of operation of products-exchange.

Such a system, by contracting the sphere of operation of commodity circulation, will facilitate the transition from socialism to communism. Moreover, it will make it possible to include the basic property of the collective farms, the product of collective farming, in the general system of national planning.

That will be a real and effective means of raising collective-farm property to the level of public property under our present-day conditions.

Will such a system be advantageous to the collective-farm peasantry? It undoubtedly will. It will, because the collective-farm peasantry will receive far more products from the state than under commodity circulation, and at much cheaper prices. Everyone knows that the collective farms which have products-exchange ("merchandising") contracts with the government receive incomparably greater advantages than the collective farms which have no such contracts. If the products-exchange system is extended to all the collective farms in the country, these advantages will become available to all our collective-farm peasantry.